Virginia § 23.1-1105 - Institutions; powers; borrowing upon endowment and other investments

§ 23.1-1105. Institutions; powers; borrowing upon endowment and other investments

A. Any institution may, with the approval of the Governor and upon the affirmative vote of at least two-thirds of its board, borrow sums that it deems necessary for and in the name of the institution and secure payment of such sums by the pledge of any stock, note, bond, and other asset held by such institution as a part of its endowment funds or unrestricted gifts from private sources.

B. Any institution may issue bonds pursuant to this section in one or more series, and such bonds shall bear such date, mature at such time, bear interest at such rate or rates not exceeding the rate specified in § 23.1-1112 that is payable at such time, be in such denomination, be in such form, either coupon or registered, carry such registration privilege, be executed in such manner, be payable in such medium of payment and at such place, and be subject to such terms of redemption, with or without premium, as the board of such institution may provide by resolution.

C. Any bonds issued pursuant to this section may be sold at public or private sale for such price or prices as the board determines. The interest cost to maturity of the moneys received for any such issue of bonds shall not exceed the rate specified in § 23.1-1112. Bonds so issued and the interest thereon (i) is payable only out of the sale or liquidation of the endowment investments, investments of unrestricted gifts from private sources, and interest accruing on such sale, liquidation, or investment that is pledged to secure the bonds so issued and (ii) is not a general obligation of such institution, the Commonwealth, the Governor, the members of the board of such institution, or any person executing the bonds so issued.

D. All moneys received or derived from the sale of any bonds issued pursuant to this section are a part of the local funds of the institution and are not state funds.

E. Each institution may use funds available for such purpose to purchase any bond issued pursuant to this section at a price not more than the sum of the principal amount of such bond and accrued interest thereon. Any bond so purchased shall be canceled unless purchased as an endowment fund investment. This subsection shall not apply to the redemption of bonds.

F. Any bond issued pursuant to this section is a security in which all public officers and bodies of the Commonwealth and its political subdivisions, insurance companies and associations, and savings banks and savings institutions, including savings and loan associations, in the Commonwealth may properly and legally invest funds under their control.

G. Any bond issued pursuant to this section, the transfer of such bond, and the income from such bond, including any profit derived from the sale of such bond, is exempt from taxation by the Commonwealth or by any locality or political subdivision of the Commonwealth.

H. Any resolution of the board authorizing the issuance of bonds pursuant to this section may contain any provision that is authorized pursuant to this chapter in connection with the issuance of bonds by institutions. Such provision shall be part of the contract with the holders of such bonds.

§ 23-30.01; 2016, c. 588.